International Advisory and Monitoring Board on the Development Fund for Iraq

Press Release
May 13, 2010

Statement by the International Advisory and Monitoring Board of the Development Fund for Iraq

The International Advisory and Monitoring Board (IAMB) of the Development Fund for Iraq
(DFI) met in Paris on April 28 and 29, 2010 and issued the following statement:
“The IAMB met to continue its oversight role over the use of resources of the DFI, which is
the principal repository for Iraq's oil-export receipts, and oversee audits of the DFI in line
with its mandate under UN Security Council Resolutions.

“United Nations Security Council Resolution 1905 (2009) recognized the need during 2010
to transition to successor arrangements for the DFI and requested the UN Secretary General
and the Government of Iraq through the head of the Committee of Financial Experts to report
quarterly on progress. The first briefing to the UN Security Council took place on April 6,
2010 and the related report has been posted on the IAMB website (www.iamb.info) and the
COFE website (www.cofe-iq.net). The Iraqi representatives briefed the IAMB on the action
plan to implement successor arrangements during 2010. The Iraqi Council of Ministers, on
March 2, 2010, approved the recommendation of the committee established by the Council of
Ministers to develop an instrument to ensure the protection of Iraqi funds. The Council of
Ministers requested the committee continue to monitor the implementation of these
recommendations, including the time-bound action plan to transition to a post-DFI
mechanism.

“The IAMB was briefed on the reporting to the UN Security Council by the UN Secretary
General in line with paragraph 3 of UNSCR 1905. The Representative of the UN Secretary
General presented the first quarterly report to the UN Security Council on April 6, 2010,
including details on progress in strengthening financial and administrative oversight of the
current DFI, as well as the legal issues and options to be considered to implement successor
arrangements and an assessment of the Government of Iraq’s progress in preparing for the
successor arrangements for the DFI and the dissolution of the IAMB by December 31, 2010.
The UN Secretary General’s report has been posted on the IAMB website. The next quarterly
briefings of the UN Security Council by the UN Secretary General and COFE is due by
end-June 2010.

“The IAMB was briefed by COFE on actions taken to enhance the transparency and
accountability of the DFI, taking into account the earlier external audit findings. The COFE
briefing of this meeting is published on the IAMB and COFE websites. The IAMB continues
to work alongside COFE to oversee Iraqi oil resources and fully coordinate their work.
COFE continues to meet monthly, and, in conjunction with the Board of Supreme Audit, performs much of the detailed follow-up and investigation of recommendations contained in
the IAMB commissioned independent audit reports. COFE continues to report to the IAMB
every two months on progress on a range of matters and these reports are posted on the
IAMB website. COFE noted that the bombings of the ministry of finance in August and mid-
December 2009 had continued to delay the publication of recent monthly summaries of DFI
inflows and outflows. COFE briefed the IAMB on the minister of oil’s report on the
installation of oil metering equipment as at end-February 2010. The revised report is posted
on the IAMB website.

“The IAMB considered the preliminary results of the 2009 audit of the DFI. The audit
continues to highlight issues of concern regarding weaknesses in controls over oil extraction
and in the spending ministries. Fieldwork is not yet complete, including as a result of delays
due to recent bombings affecting a number of ministries. The summary of the preliminary
results of the KPMG audits are available on the IAMB website. Detailed reports will be
posted on the website once finalized. KPMG will report to the IAMB in the coming weeks on
their assessment of controls over the operation of metering of oil exports.

“In accordance with the IAMB Terms of Reference, the nomination and appointment by the
Government of Iraq of the DFI external auditor is subject to approval by the IAMB. The
representatives of the Government of Iraq and COFE briefed the IAMB on the evaluation
process undertaken to select an external audit firm to conduct the 2010 audit of the resources
and disbursements of the DFI. The IAMB had earlier reviewed and approved the scope of
work and the request for proposal for the 2010 audit. The IAMB concurred with the
recommendation of COFE to proceed with the audits. Going forward, the IAMB will
coordinate with COFE to review the 2010 audit, including an interim audit to June 30, 2010.

“The next meeting of the IAMB, together with COFE, is scheduled for October 2010. COFE
will also be meeting separately in the interim.”